Indonesian electronics industry moves towards responsible and sustainable business conduct

Through a joint training programme, the ILO supports Indonesian businesses, particularly the electronics industry, to interconnect business, decent work and human rights.

News | Bali, Indonesia | 02 October 2023
BALI, Indonesia (ILO News) - Representatives of electronic companies, the Indonesian Employers’ Association (Apindo) and the Indonesian Chamber of Commerce and Industry (Kadin) participated in the ILO’s three-day training on the promotion of responsible business and decent work in Indonesia. Held in Bali from 20-23 September, the training programme was jointly organized with the United Nations Development Programme (UNDP), with support from the Government of Japan.

The participating companies identify problems, objectives and strategies related to development of human rights policy at the enterprise level. © Gita Lingga/ILO
In addition to the United Nations Guiding Principles on Business and Human Rights (UNGPs) that includes human rights due diligence (HRDD), the training programme promoted the ILO’s Tripartite Declaration of Principles concerning Multinational Enterprises (MNEs) and Social Policy, Decent Work as well as an ILO study on the electronics industry in Indonesia and its integration into global supply chains.

We plan to build a follow-up guideline not only for our internal company, but also for our external stakeholders, including our supply chains."

Kundrat Adriansyah, General Manager HR of PT Panasonic Manufacturing Indonesia
The ILO also introduced its two complementing projects on responsible business and decent work: the Resilient, Inclusive and Sustainable Supply Chains Asia (RISSC) Project and the Skills Development and Responsible Business Conduct Project in Indonesia. These two projects will be running respectively until the year of 2026 and 2025.

Funded by the Government of Japan-Ministry of Health, Labour and Welfare (MHLW), the RISSC Project aims to build more resilient, inclusive, and sustainable global supply chains for advancing decent work and addressing decent work deficit, including human and labour right risks; while the Skill Development and Responsible Business Project, funded by the Ministry of Economy, Trade and Industry (METI), aims at supporting a human-centred recovery from recent disruptions in the global supply chains. They both also focus on the electronics manufacturing sector.

Research shows that working performance of companies with diversity has increased 25 percent and companies that have decent work conditions also witness lesser labour conflicts and increased productivity."

Lusiani Julia, ILO’s Gender Focal Point
Applying participatory and active engagement as well as learning approaches, the training programme provided a venue for the participants to not only share their responsible business experiences and practices, but also to learn about the importance of core international labour standards as means to promote decent work and responsible business conduct as well as to improve the sustainable practice in the workforce.

They also learnt about workplace equality, non-discriminatory practices, and inclusivity as part of the responsible business conduct. Facilitated by the ILO’s gender focal point, Lusiani Julia, the session highlighted benefits gained by companies when they incorporate equality and inclusivity in their business practices. “Research shows that working performance of companies with diversity has increased 25 percent and companies that have decent work conditions also witness lesser labour conflicts and increased productivity,” Lusi said.

The training programme was concluded with the development of action plans on grievance mechanism, HRDD system and human rights policy. On the grievance system, the participants recommended the need for clear company policy and regulation that includes fastened grievance mechanism, tracking system, improved communications and increased accessibility as well as effective remedy.

On the HRDD system, they recommended the identification of relevant stakeholders and monitoring system, risks identification and data collection as well as capacity building for both identified internal and external stakeholders. Meanwhile on the human rights policy, the recommendations included the development and implementation of a guideline on human rights policy.

Tauvik Muhamad, National Coordinator of the ILO's RISSC Project, explains the importance of core international labour standards as means to promote decent work and responsible business conduct. Indonesia. © Gita Lingga/ILO

The ILO will continue working with relevant stakeholders to equip companies with responsible business practices and to find joint solutions in promoting and respecting human rights not only in companies’ operations but also their supply chains."

Tauvik Muhamad, National Coordinator of the RISSC Project
Tauvik Muhamad, National Coordinator of the RISSC Project, stated that the recommendations would be used as a basis for developing relevant tools to improve working conditions and business outcomes in the electronic sectors. “The training programme is only a beginning. The ILO will continue working with relevant stakeholders to equip companies with responsible business practices and to find joint solutions in promoting and respecting human rights not only in companies’ operations but also their supply chains,” he said.

As a way forward, Dede Sudono, National Officer of the Skills Development and Responsible Business Conduct Project, stated that skills development is a unique component under Responsible Business Conduct. “The idea is how the enterprises are responsible to improve and strengthen their employees’ skills for business transformation into automatization and green production. A quality apprenticeship, for example, is one of the enterprises responsibility on respecting human rights,” Dede added.

The idea is how the enterprises are responsible to improve and strengthen their employees’ skills for business transformation into automatization and green production."

Dede Sudono, National Officer of the Skills Development and Responsible Business Conduct Project
Representing PT Panasonic Manufacturing Indonesia, Kundrat Adriansyah, General Manager HR, stated that his team valued the knowledge-sharing and the demonstration of good practices that have deepened their understanding about the interconnection among business, decent work and human rights. “From our main corporate in Japan, we already have a general guideline about business ethics and conduct. Yet, we plan to build a follow-up guideline not only for our internal company, but also for our external stakeholders, including our supply chains,” he stated.

He added that the company will also work together with the trade union to ensure the effectiveness of the implementation of the guideline. “We have maintained a good working relation with the trade union. It is also part of the responsible business practice.”

The electronic sector has been a key driver of economic growth and employment in many developing countries, including Indonesia. Indonesia’s electronic industry has contributed to lucrative domestic market and strong regional supply chains.